Last week, we heard that Aliens: Colonial Marines co-developers TimeGate had filed for Chapter 11 bankruptcy protection following poor reception of the game and a false advertising lawsuit . As of today, Kotaku reports that its sources are saying the studio's staff has been laid off.

The reason for the closure may have to do with an attempt by Colonial Marines publisher SouthPeak to force a liquidation of the studio in arbitration. We have no official word yet on whether this is the case, but we are continuing to follow the story as more details become available. TimeGate, founded in 1998, was probably best known prior to Colonial Marines for the sci-fi FPS Section 8.

TimeGate was known to be working on a new, free-to-play project called Minimum, which was scheduled to enter a closed alpha last month. The fate of the project is unknown, but a total liquidation of the studio would seem to leave little chance of its eventual release.